Court File and Parties

Ottawa Court File No.: 12-56265/11-50312 Date: 2019/12/19 Superior Court of Justice - Ontario

Between: Mildred McMurtry, Plaintiff (Court file no. 12-56265) And John McMurtry, by his litigation guardian, Emily McMurtry and Mic Mac Realty (Ottawa) Ltd., Defendants

And Between: John McMurtry, by his litigation guardian, Emily McMurtry, Plaintiff (Court file no. 11-50312) And Jim McMurtry, Defendant

And Between: Jim McMurtry, Plaintiff by Counterclaim (Court file no. 11-50312) And John McMurtry, by his litigation guardian, Emily McMurtry, Brenda McMurtry, Barry Coons, Bouris Wilson LLP and Mic Mac Realty (Ottawa) Ltd., Defendants by Counterclaim

Before: Madam Justice Sylvia Corthorn

Counsel: Mark W. Smith for Mildred McMurtry (12-56265) Jeff Saikaley and James Plotkin for John McMurtry (Both actions) and for Brenda McMurtry (11-50312) Daniel Mayo and Andrew West for Jim McMurtry (11-50312)

Heard: December 10, 2019

RULING ON COSTS

Introduction

[1] The trials of these two actions are proceeding together, but in two parts. The first part was completed in the fall of 2015. The second part was scheduled to proceed for three weeks commencing on December 2, 2019.

[2] Three parties are advancing oppression remedy claims: • John McMurtry, as plaintiff in the 2011 action; • Jim McMurtry, as plaintiff by counterclaim in the 2011 action; and • Mildred McMurtry, as plaintiff in the 2012 action.

[3] For ease of reference, each of the parties to these actions is referred to by their first name only. For the purpose of this endorsement, Mildred and Jim are referred to collectively as “the Plaintiffs” and their counsel as “Plaintiffs’ Counsel”; John and Brenda are referred to collectively as “the Defendants” and their counsel as “Defendants’ Counsel”; and all dates are in 2019 unless otherwise noted.

[4] In late November, Mildred decided that she would bring a motion for leave to amend her statement of claim. At the same time, Jim decided that he would bring a motion for leave to amend his counterclaim. These two motions are collectively referred to as “the Motions”.

[5] As a result, the second part of the trials was adjourned and a timetable was set, with the Motions scheduled for December 10. On the return of the Motions, the Plaintiffs requested an adjournment. They did so because Plaintiffs’ Counsel wished to cross-examine the deponent of the affidavit upon which the Defendants rely in response to the Motions.

[6] At the outset on December 10, the matter proceeded as a contested adjournment. The parties ultimately agreed on the terms of an adjournment—save and except they were unable to agree upon costs.

[7] The Defendants seek substantial indemnity costs for trial preparation (“Trial Costs”) and for the Motions (“Motion Costs”). They request that the Plaintiffs each be responsible for 50 per cent of the costs ordered, the costs be payable thrown away, and the Plaintiffs be required to pay the costs ordered as a condition precedent to proceeding further with the Motions.

[8] The Motions are scheduled to be heard by Master Fortier on March 6, 2020.

Background

a) Trial Management Conferences

[9] In preparation for the trials continuing on December 2, a trial management conference (“TMC”) was scheduled for each of November 7 and 21. At the first TMC, Defendants’ Counsel raised the issue of the state of the Plaintiffs’ pleadings. In response, Plaintiffs’ Counsel advised that they had not determined whether their respective clients would be pursuing motions for leave to amend their respective pleadings.

[10] With the trials of the actions scheduled to continue on December 2, decisions in that regard were required immediately. For that reason, November 14 was set as the deadline for Plaintiffs’ Counsel to advise Defendants’ Counsel whether the Plaintiffs intended to seek leave to amend their pleadings. If the Plaintiffs intended to do so, Plaintiffs’ Counsel were required, by the same date, to provide Defendants’ Counsel with copies of the proposed amended pleadings.

[11] As of November 14, neither of the Plaintiffs intended to seek leave to amend their pleadings. They both intended to proceed with the continuation of the trials, on December 2, on the basis of their original pleadings. Anticipating that the trials would continue on that date, Defendants’ Counsel continued their trial preparation. That preparation had commenced some time prior to November 14 and was based on the oppression remedy claims set out in the Plaintiffs’ original pleadings.

[12] At the second TMC, on November 21, Defendants’ Counsel informed the court and Plaintiffs’ Counsel of the position the Defendants would be taking at trial in light of the Plaintiffs’ decisions not to seek leave to amend their pleadings. The Defendants’ position is that the Plaintiffs are precluded from calling any evidence with respect to oppressive conduct alleged to have occurred subsequent to the dates of the Plaintiffs’ original pleadings (i.e., in 2011 for Jim and in 2012 for Mildred). The Defendants’ position is that evidence is not relevant to an oppression remedy claim unless the evidence relates to a specific act of oppression alleged in the pleading.

[13] Defendants’ Counsel was under no obligation to disclose that trial strategy to Plaintiffs’ Counsel or to the court. In making that disclosure, Defendants’ Counsel extended a professional courtesy to Plaintiffs’ Counsel.

[14] Having been advised of the Defendants’ trial strategy, Plaintiffs’ Counsel concluded that their respective clients would seek leave to amend their respective pleadings. I use the verb, “concluded”, because the decisions to seek leave to amend the pleadings were made without either of Plaintiffs’ Counsel requiring a break in the TMC to seek instructions from their client. The Plaintiffs were not present at either TMC. Plaintiffs’ Counsel informed Defendants’ Counsel and the court that the Plaintiffs would seek leave to amend their pleadings by adding new allegations of oppressive conduct.

[15] The Plaintiffs were given the opportunity to bring the Motions, notwithstanding the passage of the November 14 deadline (see the TMC endorsement dated November 22). Defendants’ Counsel advised Plaintiffs’ Counsel and the court that the Defendants would not consent to the proposed amendments; to the contrary, the Defendants would oppose the Motions on the basis of substantive law arguments. Details of those arguments were not disclosed at the time.

[16] It was clear that the trials could not continue on December 2 as scheduled. The trial time was vacated, a timeline was set for the exchange of materials on the Motions, and the Motions were scheduled for December 10.

b) Proposed Amended Pleadings

[17] In their proposed amended pleadings, the Plaintiffs include allegations with respect to specific conduct on the part of one or both of the Defendants dating as far back as 2006.

[18] Mildred’s proposed amended pleading does not include any allegations related to the discoverability principle, although some of the conduct newly alleged dates back 13 years.

[19] Jim’s proposed amended pleading addresses the discoverability principle with a broad brush. At para. 8 of his proposed amended pleading, Jim alleges that “a good deal of the conduct for which I claim was only disclosed to me in [sic] October 21, 2019 …”. Jim’s pleading does not particularize which of the conduct he seeks to reference by way of amendment falls within that category.

[20] In their responding materials, the Defendants raise a limitation defence—specifically discoverability—with respect to the vast majority of the newly made allegations set out in the proposed amended pleadings.

c) Pleading Amendment Motions

[21] In response to the Motions, the Defendants rely on the affidavit of Emily McMurtry. She is the litigation guardian for John McMurtry. John is a party to both actions. Brenda is a party to the 2011 action only—as a defendant to Jim’s counterclaim.

[22] Following receipt of the Defendants’ responding materials, Plaintiffs’ Counsel requested the opportunity to cross-examine Emily McMurtry on her affidavit. Upon receipt of that request, Defendants’ Counsel inquired in an effort to reach an agreement with respect to terms upon which the Motions might be adjourned for that purpose. In his December 6 email, Defendants’ Counsel said:

In an effort to resolve this matter, could you kindly advise what exactly you would like to cross-examine Emily McMurtry on? We aren’t asking for your precise questions, but rather what content within the affidavit you believe required cross-examination.

If we agree cross-examination is appropriate, we will consider consenting to the adjournment. As of now, however, it remains unclear to us what you would need to cross-examiner her on given the affidavit’s contents.

[23] In his responding email of December 9, Mildred’s Counsel said, “I intend to cross-examine Emily McMurtry within the four corners of her Affidavit. I do not believe that it is my obligation to limit myself to any particular aspect of the affidavit. I will leave it to you to determine whether or not you will consent to the adjournment.”

[24] On December 10, Plaintiffs’ Counsel maintained their request for an adjournment of the Motions for the purpose of cross-examining Emily McMurtry; the Defendants opposed the request.

[25] The Defendants do not dispute the Plaintiffs’ right to cross-examine Emily McMurtry on her affidavit. But they submit that right is not absolute. They argue that the contents of Emily McMurtry’s affidavit are such that there is effectively nothing to be gained through cross-examination that could assist either the parties or the court on the Motions.

[26] During submissions from Plaintiffs’ Counsel on the contested adjournment, it became clear that Mildred (and possibly Jim) would seek leave of the court to deliver additional materials on the Motions, if permitted to do so after completing cross-examination. The additional materials might include a revised amended pleading in which the Plaintiffs specifically address discoverability.

[27] The court was being asked to determine the Plaintiffs’ entitlement to cross-examine Emily McMurtry (a) on an affidavit filed in response to proposed pleadings upon which the Plaintiffs will likely not be relying, and (b) without the Plaintiffs first delivering copies of the revised amended pleadings that will ultimately be the subject of the Motions. The issue of entitlement to cross-examine cannot be determined in these circumstances.

[28] During the submissions on the contested adjournment, it appeared that Plaintiffs’ Counsel developed an appreciation for the seriousness of (a) the potential deficiencies in the proposed amended pleadings, and (b) the limitation defence advanced. Plaintiffs’ Counsel require additional time to address those issues with their clients before the Motions can continue.

[29] Counsel were given an opportunity to consider the status of the Motions and to attempt to reach an agreement, to the extent possible, with respect to the adjournment. Counsel agreed that the Motions would be adjourned. They were unable to agree on terms with respect to the Trial Costs and Motion Costs.

[30] Plaintiffs’ Counsel were asked if they wished an adjournment to consider the written submissions with respect to costs received from Defendants’ Counsel that day. Plaintiffs’ Counsel declined that opportunity; they were content to make submissions that day with respect to both Trial Costs and Motion Costs.

d) Positions of the Parties

[31] The Defendants seek substantial indemnity Trial Costs and Motion Costs, thrown away, payable by the Plaintiffs, as a condition precedent to the Plaintiffs being entitled to proceed with the Motions.

[32] The Plaintiffs agree that the Defendants are entitled to costs for the adjournment of the trial. The Plaintiffs submit that those costs should be reserved for the trial judge to fix. In the alternative, the Plaintiffs submit that if Trial Costs are fixed at this time, they should be payable in the cause.

[33] The Plaintiffs do not dispute that the Defendants are entitled to costs with respect to the adjournment of the Motions. The Plaintiffs submit that only costs related to the appearance on December 10 should be awarded at this time. The Plaintiffs describe the Motions as “ongoing”. They submit that the balance of the Motion Costs should be left to Master Fortier to address following argument on the Motions.

[34] In the alternative, the Plaintiffs submit that the Motion Costs, if awarded now, should be less than the amount claimed. The Plaintiffs argue that the Defendants will benefit from some of the work already completed when preparing for the motion before Master Fortier.

[35] The Plaintiffs also argue that Motion Costs, if awarded now, should (a) be payable either in the cause or in any event of the cause, and (b) not be a pre-condition to the Plaintiffs proceeding with the Motions.

Disposition

[36] The Defendants are entitled to substantial indemnity costs, thrown away, of $37,450. The Plaintiffs are each responsible for 50 per cent of that amount. They must each pay their respective share of the costs awarded by 3:00 p.m. on January 13, 2020, by certified cheque or bank draft payable to “Caza Saikaley in trust.” If either of the Plaintiffs fails to pay their respective 50 per cent share of that amount by the date and in the manner prescribed, then that party is prohibited from proceeding with their pleadings motion.

Analysis

a) Scale on Which Costs are Awarded

[37] Litigation can be de-railed because of unforeseen, unexpected events beyond the control of the parties, their counsel, or the court. That is not what has happened in these actions.

[38] These actions have been de-railed because Plaintiffs’ Counsel failed, until only days prior to trial, to appreciate the relationship between the contents of the pleadings, the evidence that can be led at trial, and the issues to be determined at the continuation of the trials of these oppression remedy claims. That failure is particularly unfortunate when the following factors are considered:

• The actions are now seven and eight years old; they will be at least eight and nine years old by the time the trials of the actions continue. Up to an additional six months may pass from the conclusion of the trials before a decision is rendered. More time will pass before a decision is rendered with respect to the costs of the trials; • The unsuccessful party on the first part of the trials appealed (unsuccessfully) the trial decision. An appeal from the outcome of the second part of the trials would only extend further the delay to a final resolution of these actions; • A number of experts, jointly retained by the parties, prepared reports for the purpose of trial. Those reports may be stale-dated and require updating for the new trial date, once identified. The parties will incur additional costs if updated reports are prepared; • The examinations for discovery of the parties were conducted up to as many as five years ago. If the Plaintiffs are granted leave to amend their pleadings, it is likely that additional oral discovery will be required. It is also possible that additional documentary discovery will be required; • In late 2015, subsequent to the first part of the trials, John suffered a stroke. He remains disabled to the point that he is not capable of giving evidence on an examination for discovery or at trial. Defendants’ Counsel has already advised Plaintiffs’ Counsel and the court that, prior to or at the continuation of the trials, the Defendants will be seeking relief because of John’s inability to appear as a witness. For example, the Defendants may seek leave to rely on transcripts from John’s examination for discovery and/or from cross-examination of John on affidavits filed with respect to motions previously determined; • Mildred is elderly. Her counsel advises that he both communicates with and receives instructions from her exclusively in writing. As of late November, Mildred’s counsel had not determined what relief, if any, might be requested to address Mildred’s limitations when giving evidence on discovery or testifying at trial. Query how a further examination for discovery of Mildred, if requested, will be conducted; and • Leaving aside the issues related to Mildred’s potential inability to give evidence at examination for discovery or to testify at trial, it is not entirely certain that she will remain well enough to fully understand the outcome of the actions, once determined, let alone see the benefit of a final resolution, whatever the outcome.

[39] The McMurtry family has been fractured by these actions. This division will have persisted for more than ten years by the time finality in these actions is achieved.

[40] I find that the duration of these actions has been unnecessarily lengthened as a result of the decision on the Plaintiffs’ part, a matter of days prior to trial, to bring the Motions (r. 57.01(1)(e) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194). I say “on the Plaintiffs’ part” without any certainty that they had input into the decision. The Plaintiffs were not present, nor does it appear they were consulted for instructions, at the second TMC when Plaintiffs’ Counsel advised that the Plaintiffs were seeking leave to amend their pleadings. Regardless, a party is responsible for the manner in which litigation is conducted by their counsel.

[41] I also find that the professional courtesy extended by Defendants’ Counsel (paras. 12-13, above) contributed significantly to the Plaintiffs’ decision to bring the Motions. There is nothing to indicate that the Plaintiffs would have reversed course from their November 14 decision had the Defendants not extended that courtesy.

[42] Had Defendants’ Counsel not disclosed their trial strategy and the trials continued on December 2—a mere 10 days after the date of the second TMC—what opportunity, if any, would the Plaintiffs have had to address the potential deficiencies in their pleadings?

[43] The trial strategy disclosed by Defendants’ Counsel was predictable. In the context of oppression remedy claims in particular, that strategy could have been anticipated by Plaintiffs’ Counsel.

[44] The Defendants’ response to the Motions was as predictable as the trial strategy disclosed. The proposed amended pleadings include allegations of conduct that dates back to 2006 (i.e., pre-dating both the date on which Mildred’s statement of claim was issued and the date of Jim’s counterclaim). The proposed amended pleadings include minimal, if any, allegations addressing the discoverability principle. The Defendants’ reliance on a limitation defence was predictable and could have been anticipated by Plaintiffs’ Counsel.

[45] The requirements with respect to pleading the discoverability principle in the context of a motion for leave to amend a statement of claim are set out in Parsons v. Deutscher Estate, 2008 CarswellOnt 4370, [2008] O.J. No. 3014 (Ont. S.C.). At para. 5 of that decision, Lax J. summarized the relevant principles established in three earlier decisions of Ontario Masters (citations omitted). A plaintiff who seeks leave to amend their statement of claim and, in doing so, relies on discoverability must, in their proposed amended statement of claim:

• clearly plead discoverability, including the facts giving rise to the application of the discoverability principle, in the proposed amended statement of claim; • if they intend to prove as the date of the cause of action a date other than that on which the events occurred, plead the date on which they so rely; and • plead the material facts upon which they rely in support of the application of discoverability.

[46] With respect to the third bullet point above, a plaintiff is not entitled to plead discoverability in a reply. To proceed in that manner is fatal to the proposed amended statement of claim.

[47] I find that the proposed amended pleadings delivered to date by each of Mildred and Jim fail to meet the requirements set out in Parsons.

[48] I also find that the duration of these actions has been unnecessarily lengthened because of (a) the Plaintiffs’ failure to address discoverability in their proposed amended pleadings, and (b) the adjournment of the trial which resulted from that failure (r. 57.01(1)(e)). Once again, in referring to “the failure” as that of the Plaintiffs, I recognize that the Plaintiffs did not personally draft the proposed amended pleadings. The Plaintiffs relied on their respective counsel to draft those documents. Regardless, a party is responsible for the manner in which litigation is conducted by their counsel.

[49] An award of costs on the substantial indemnity scale is very much the exception. Such an award is made in “rare and exceptional cases to mark the court’s disapproval of the conduct of the party in the litigation” (Hunt v. TD Securities Inc. (2003), 2003 CanLII 3649 (ON CA), 66 O.R. (3d) 481 (C.A.), at para. 123). The party against whom costs are awarded on this elevated scale must have engaged, in conduct in the litigation that is “reprehensible, scandalous or outrageous” (Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3, at para. 260).

[50] At paras. 7-9 of the decision in Manning v. Epp, [2006] O.J. No. 4239 (Ont. S.C.), Lax J. said:

Costs on the higher scale can be awarded as a form of chastisement and as a mark of the court’s disapproval of a litigant’s conduct. … The task for the court is to punish and deter unwarranted allegations and egregious conduct, but without discouraging the tenacious pursuit and advancement of serious claims of impropriety in a proper case.

[51] I find that the Plaintiffs’ conduct in the litigation, specifically the manner in which they handled the Motions warrants sanction by the court: i.e., vacillation in decision-making, timing of the Motions, failing to appreciate the significance of amendments to the pleadings, and effectively requiring a ‘do-over’. I find that the Defendants are entitled to Trial Costs and Motion Costs on the substantial indemnity scale.

b) Trial Costs

[52] It was entirely reasonable for Defendants’ Counsel to be preparing for trial from November 14 to 22. They may have been negligent had they not done so.

[53] For the reasons given, I find that the Trial Costs were incurred as a result of an ill-considered approach taken by the Plaintiffs’ to their respective pleadings. Once again, whether or not the Plaintiffs were personally involved in directing the approach taken, they are responsible for the manner in which the actions are being conducted by their counsel.

[54] The Plaintiffs argue that the Defendants will benefit from trial preparation already completed once the trials eventually resume. I disagree, for a number of reasons. First, the preparation to date for trial is based on the Plaintiffs’ pleadings in their current form. If the Plaintiffs are granted leave to amend their pleadings, then the preparation required in due course may differ, at least in some ways, from that completed to date.

[55] Second, it will be at least a year before the trials continue. By that time the benefit of the preparation to date will be all but lost. There may be greater efficiency for Defendants’ Counsel to start from scratch than to attempt to pick up the pieces from what is now incomplete trial preparation.

[56] Third, the court is encouraged to fix costs as close in time to steps in a proceeding as is possible. Where possible, costs should not be reserved to a later date: see, for example, r. 57.03 with respect to costs orders on motions as discussed in paras. 71-73, below.

[57] I find that it would not be reasonable to fix the Defendants’ Trial Costs and order them payable in the cause. Such an order would not address the prejudice already suffered by the Defendants because of the Plaintiffs’ conduct.

[58] I find that the Defendants are entitled to their Trial Costs thrown away.

c) Motion Costs

[59] When the Motions were adjourned, a timeline was set for the delivery of materials prior to the return date of March 6, 2020. When setting that timeline, I described the materials to be delivered by the Plaintiffs as a “supplementary” motion record. On reflection, and for the sake of efficiency and fairness to the parties and Master Fortier, the Motions shall be argued on the basis of a single set of materials. The parties shall not be entitled to refer Master Fortier to materials already filed on the Motions.

[60] There are two exceptions to that prohibition. The first is for the Defendants’ book of authorities. If the contents of that document do not change in any way from the version already filed, then the Defendants may rely on the version already delivered.

[61] The second exception is that Jim may refer to materials already filed, but only if he relies on the proposed amended counterclaim already filed. If Jim intends to rely on a revised amended pleading, he must deliver a fresh set of materials.

[62] Otherwise, the parties shall file “fresh” materials and may only reference the fresh materials when arguing the Motions before Master Fortier.

[63] I agree with the Plaintiffs that the Defendants may see some benefit from the work performed to date by their counsel in response to the Motions. That benefit will not, however, be significant. Defendants’ Counsel will have to review two revised amended pleadings and prepare materials in response to them. Once again, there may be greater efficiency in starting from scratch rather than attempting to pick up the pieces from the work completed to date.

[64] I find that the Defendants will benefit from the work completed to date with respect to the legal arguments, responding factum, and responding book of authorities. In recognition of that benefit, I find it reasonable to award the Defendants 75 per cent of their Motion Costs at this time. The remaining 25 per cent of the Motion Costs shall be reserved to Master Fortier or, if the Motions do not proceed, shall be fixed by the trial judge.

[65] The Defendants are, at this time, entitled to 75 per cent of their Motion Costs thrown away.

d) Payment of Costs as a Condition to Proceeding with the Motions

[66] The Defendants rely on the decision of the Ontario Court of Appeal in King’s Gate Developments Inc. v. Drake (1994), 1994 CanLII 416 (ON CA), 17 O.R. (3d) 841 (C.A.). In their decision, the Court overturned the decision of a motions judge who refused, on the eve of trial, to grant the defendants leave to amend their pleading. The Court recognized that r. 26.01 permits amendments to pleadings at any stage of an action. It cautioned, however, that parties should not be encouraged to utilize the rule unreasonably, as the defendants had in that case.

[67] The Court concluded that the prejudice caused by the late-stage amendment to the defendants’ pleading was compensable through costs on a solicitor-client basis. The costs awarded included those for steps that would have to be taken as a result of the amendments (i.e., the delivery of fresh pleadings and additional documentary and oral discovery). Also, in addressing the compensable prejudice to the plaintiffs, the Court determined that the costs ordered had to be paid before the defendants could amend their pleading.

[68] The Defendants argue that the condition they request is in keeping with the nature of the relief granted by the Court of Appeal in King’s Gate. I agree.

[69] The Defendants also rely on a costs award made against them in 2015. That award relates to the Defendants’ unsuccessful motion for an adjournment of part one of the trials and for leave to amend their pleadings (McMurtry v. McMurtry, 2015 ONSC 7550). That motion was made immediately prior to the commencement of the trials.

[70] Having lost the motion, the Defendants were ordered to pay the Plaintiffs’ their costs of the motion within 30 days following the date of release of the ruling on costs. Mildred was entitled to costs of approximately $4,575 and Jim of $4,000.

[71] In making that order, I relied on r. 57.03(1)(a), which provides that, “unless the court is satisfied that a different order would be more just, the court shall … fix the costs of the motion and order them to be paid within 30 days”. The condition requested by the Defendants with respect to the Motion Costs is in keeping with both my earlier ruling and that subrule.

[72] Lastly, the condition requested by the Defendants is in keeping with the sanction set out in r. 57.03(2). That subrule provides that, “[w]here a party fails to pay the costs of a motion as required under subrule (1), the court may dismiss or stay the party’s proceeding, strike out the party’s defence or make such other order as is just.” The Defendants faced such a sanction in 2015 in the event they did not pay costs as ordered.

[73] The 30-day period set out in r. 57.03(1), if based on the date of this ruling ends on January 19, 2020. That date falls after the deadline by which the Plaintiffs must serve their materials (January 14, 2020). Therefore, unless that 30-day period is abridged, the Defendants may incur costs for work on the Motions before the Plaintiffs have paid the costs ordered herein.

[74] The Plaintiffs have, however, been aware since December 10 of the possibility that a condition of this kind might be imposed as a term of the costs order. If December 10 is used as the start of the 30-day period, that period expires on January 9, 2020. In calculating that end date, I exclude December 10 and include January 9, 2020 (r. 3.01(a)).

[75] In the circumstances, it is reasonable to require the Plaintiffs to pay the costs ordered herein no later than 4:00 p.m. on January 13, 2010—the day before the deadline by which they are to serve their materials on the Motions.

[76] Costs shall be payable by certified cheque or bank draft, payable to “Caza Saikaley in trust”.

[77] If one of the Plaintiffs fails to pay their respective share of the costs ordered by January 13, 2020 and in the manner described, then that party shall, pending further order of the court, be prohibited from proceeding with a motion for leave to amend their pleading.

e) Quantum of Costs

[78] In their costs outline, the Defendants identify their counsel’s time on three scales—full indemnity (i.e., actual costs), partial indemnity, and substantial indemnity. For the partial indemnity scale, the Defendants rely on 60 per cent of the full indemnity costs, and for the substantial indemnity scale, 80 per cent of the full indemnity costs.

[79] Defendants’ Counsel acknowledged that the use of the 80 per cent multiplier is an error; the multiplier should have been 90 per cent. Regardless, the Defendants rely on the figures set out in their costs outline. Given the Defendants’ position in that regard, I rely on the substantial indemnity costs calculated using the 80 per cent multiplier.

[80] The Plaintiffs did not take issue with the full indemnity hourly rates listed in the costs outline. I find that the full indemnity rates claimed for senior counsel, associate counsel, the articling student, and the law clerk are reasonable.

i) Trial Costs

[81] The Trial Costs claimed on the substantial indemnity scale are broken down by category of work and include:

Fees Preparation for trial $ 19,747.88[^1] Supplementary affidavit of documents $ 2,422.72 Request to admit $ 1,120.96 Notice of business records $ 445.22 Sub-total $ 23,736.78

Disbursements Process Server $ 440.08 Total $ 24,716.86

[82] The work done between November 14 and 22 falls under the heading “Preparation for trial”. The work under the other three categories was done prior to November 14. The Defendants submit that they are entitled to the costs associated with that work, thrown away, because that work was based on the existing pleadings. As a result, that work will have to be re-done if the Plaintiffs are granted leave to amend their pleadings.

[83] If the Plaintiffs are granted leave to amend their pleadings, the Defendants will be required to respond to additional issues. The steps the Defendants will be required to take include serving (a) a further supplementary affidavit of documents, (b) a further request to admit, and (c) another notice of business records. I find that Defendants’ Counsel will not be able to avoid picking up the pieces from the existing documents. They will have to cross-reference existing documents with the reviewed amended pleadings and identify new issues not yet addressed in any one or more of the affidavit of documents, request to admit, and notice of business records. I find that there will be duplication of effort and that the duplication of effort will not necessarily be outweighed by any efficiency that might otherwise be gained from work done to date.

[84] Included in the costs outline is a copy of the process server’s invoice. From the contents of that document, I infer that the documents he or she was asked to serve were summonses to witnesses. The Defendants will not see any benefit from that expense. Summonses will have to be served on those witnesses again in the future.

[85] For those reasons, the Defendants are entitled to all of the Trial Costs on a substantial indemnity basis: $24,716.86 for fees, disbursements, and applicable HST.[^2]

ii) Motion Costs

[86] The Defendants claim Motion Costs on the substantial indemnity scale of $13,587.12, plus a counsel fee (for senior and associate counsel) for the appearance on the contested adjournment. The Defendants do not, as part of the Motion Costs, make any claim for disbursements.

[87] I find that the docketed time of all timekeepers who worked on the Motions is reasonable. The docketed time is reflected in the quality of the materials delivered on the motion. The approach taken in response to the Motions was focussed and the responding materials were streamlined. I see no reason to reduce the starting point from which to calculate 75 per cent of amount claimed for Motion Costs.

[88] I also find that four hours for the appearance on the contested adjournment is reasonable. The start time was delayed by over an hour because of the court’s schedule. The contested adjournment and the discussion of the timeline for delivery of materials on the Motions were not completed until the afternoon.

[89] The Plaintiffs did not take issue with both senior and associate counsel being present on behalf of the Defendants for the purpose of the contested adjournment. I note that Jim was represented by senior and associate counsel.

[90] The Defendants are entitled to a counsel fee of $2,542.50.[^3] I see no reason to apply the 80 per cent multiplier used in the costs outline. There is no reason to repeat that error.

[91] In summary, the Defendants are entitled to Motion Costs and a counsel fee for the contested adjournment, both on the substantial indemnity scale, totalling $12,732.84 (($13,587.12 x 0.75) + $2,542.50)). It remains open to the Defendants to pursue the balance of their Motion Costs[^4] before Master Fortier or the trial judge, as determined by whether the Motions proceed.

Summary

[92] I make the following order:

1. Mildred McMurtry and Jim McMurtry shall pay to John McMurtry and Brenda McMurtry their costs of the adjournment of the trial and with respect to the pleading amendment motions, on the substantial indemnity scale, thrown away, in the total amount of $37,450.00 (“the Costs”)[^5].
2. Mildred McMurtry and Jim McMurtry shall each pay $18,725.00 (50 per cent of the Costs).
3. The Costs shall be paid: a) by certified cheque or bank draft payable to “Caza Saikaley in trust”; and b) no later than 4:00 p.m. on January 13, 2019.
4. In the event either Mildred McMurtry or Jim McMurtry fails to pay their respective share of the Costs, then the defaulting party shall not be entitled to proceed with a motion for leave to amend their pleading.
5. John McMurtry’s and Brenda McMurtry’s entitlement to the 25 per cent of their costs of the pleadings amendment motions not addressed in this order shall be reserved to Master Fortier, following argument on the motions or, for any such motion not pursued, to the trial judge.

Date: December 19, 2019

Madam Justice Sylvia Corthorn

OTTAWA COURT FILE NO.: 12-56265/11-50312 DATE: 2019/12/19

SUPERIOR COURT OF JUSTICE – ONTARIO

Court File No. 12-56265 BETWEEN: Mildred McMurtry, Plaintiff AND John McMurtry, by his litigation guardian, Emily McMurtry and Mic Mac Realty (Ottawa) Ltd., Defendants

Court File No. 11-50312 AND BETWEEN: John McMurtry, by his litigation guardian, Emily McMurtry, Plaintiff AND Jim McMurtry, Defendant

AND BETWEEN: Jim McMurtry, Plaintiff by Counterclaim AND John McMurtry, by his litigation guardian, Emily McMurtry, Brenda McMurtry, Barry Coons, Bouris Wilson LLP and Mic Mac Realty (Ottawa) Ltd., Defendants by Counterclaim

RULING ON COSTS

Madam Justice Sylvia Corthorn

Released: December 19, 2019

[^1]: All figures include HST. [^2]: If the Defendants’ Trial Costs on the substantial indemnity scale were calculated using the 90 per cent multiplier, they would total in excess of $27,000. [^3]: $2,542.50 = ($425 + $200)/hr. x 4 hrs. x 0.90 x 1.13) [^4]: By my calculation, the balance of the Motion Costs is $3,396.78 = $13,587.12 x 0.25. [^5]: $37,450.00 = $24,716.86 + $12,737.84.